Security Interest in Movable Property Act, 2019
Act 8 of 2019
- Published in Uganda Gazette 20 on 30 April 2019
- Assented to on 31 March 2019
- Commenced on 31 May 2019 by Security Interest in Movable Property Act (Commencement) Instrument, 2019
- [This is the version of this document from 30 April 2019.]
Part I – Preliminary
1. CommencementThis Act shall come into force on a date appointed by the Minister, by statutory instrument.
2. InterpretationIn this Act, unless the context otherwise requires—"accession" means a tangible asset that is installed in or is physically attached to, another movable property in such a manner that the identity of the tangible asset is not lost;"accounts receivable" means a payment of a monetary obligation that is not evidenced by a negotiable instrument or an investment security;"bureau" means the Uganda Registration Services Bureau, established by the Uganda Registration Services Bureau Act, Cap. 210;"cash proceeds" means money, cheques, bank drafts on deposit accounts in financial institutions derived from lease, sale or other disposition of movable collateral;"chattel" means personal property that can be completely transferred by delivery or property in respect of which a valid document of title exists;"collateral" means movable property that is subject to a security interest;"commercial consignment" means a consignment where a consignor reserves an interest in the tangible assets that the consignor delivers to the consignee for the purpose of sale, lease or other disposition and both the consignor and consignee in the ordinary course of business, deal in those assets;"commingled goods" means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass;"competing claimant" means a creditor of a grantor or other person with rights in the collateral that may be in competition with the rights of the secured creditor in the same collateral, including—(a)another secured creditor of the grantor that has a security interest in the same collateral;(b)another creditor of the grantor that has a right in the same collateral;(c)a representative of the grantor in insolvency proceedings; or(d)a buyer or other transferee, lessee or licensee of collateral;"debtor" means—(a)a person who owes payment or performance of a secured obligation, whether or not that person owns or has rights in the collateral;(b)a seller of receivables;(c)a lessee under a lease; or(d)where the debtor and the owner of the collateral are not the same person—(i)in any provision dealing with the collateral, the owner of the collateral;(ii)in any provision dealing with the obligation, the person under the obligation; and(iii)both the debtor and the owner, where the context permits or requires;"default" means the occurrence of an event that constitutes breach under the terms of an agreement between the grantor and the secured creditor;"deposit account" means a demand, time, savings, passbook, or similar account maintained with a financial institution licensed by the Bank of Uganda or under any law in Uganda;"document of title" means a document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold and dispose of the goods it covers;"financial institution" means a bank, credit institution or microfinance deposit taking institution licensed under the Financial Institutions Act or any other law;"financial lease" means a lease of a tangible asset where—(a)the lessee automatically becomes the owner of the tangible asset;(b)the lessee may become the owner of the tangible asset by payment of a nominal price at the end of the lease; or(c)the tangible asset has not more than a nominal residual value;"fixture" means a tangible asset that is physically attached or is intended to become physically attached to immovable property without losing its separate identity;"grantor" means—(a)a person that creates a security interest to secure either its own obligation or that of another person;(b)a buyer that acquires goods whose title is to be retained by the seller;(c)a grantor of any charge, chattel mortgage, pledge or similar interest in movable property;(d)a lessee under a financial lease;(e)consignee who receives goods from another person under a commercial consignment; or(f)a seller of accounts receivable and a lessee under an operating lease, even though the receivable or the object of the lease does not secure an obligation;"intangible asset" means accounts receivable, deposit accounts, electronic securities and intellectual property;"Intellectual property" means—(a)literary, scientific and artistic works protected under the Copyright and Neighbouring Rights Act, 2006;(b)industrial property rights protected under the Industrial Property Act, 2014;(c)trade mark as protected in the Trademarks Act, 2010; and(d)any other related right."inventory" means tangible assets that are—(a)held for sale or lease in the ordinary course of business; and(b)raw materials, work in progress and materials used in a business;"lien" means a right in property which is created by operation of law, by an order of court or other legal authority, or by the authority of an administrator in an insolvency proceeding but does not include a right of retention;"Minister" means the Minister responsible for justice;"Money lender" has the meaning assigned to it under the Tier 4 Microfinance Institutions and Money Lenders Act, 2016;"movable property" includes goods, tangible assets, intangible assets, investment securities, money, negotiable instruments and documents of title;"negotiable instrument" means a bill of exchange, cheque or promissory note, that satisfies the requirements for negotiability under the law governing negotiable instruments;"perfected security interest" means a security interest that is protected from third party claims through any of the methods prescribed in section 12 of this Act;"unperfected security interest" means a security interest that is not protected from third party claims as prescribed in this Act;"person" includes a company, association or body of persons corporate or unincorporate;"possession" means having physical custody of a tangible asset by a person;"proceeds" includes whatever is acquired upon a sale, lease or other disposition of a collateral, such as money, property exchanged for the original collateral, property purchased with cash proceeds, a deposit account into which cash proceeds are deposited, and a right to insurance payment or other compensation for loss or damage of the collateral;"registrar" includes the Registrar General, an assistant registrar or other officer performing the duty of registration of security interests in movable property under this Act;"secured creditor" means a person in whose favor a security interest is created under a security interest agreement and includes—(a)a chargee under any type of charge or chattel mortgagee and a holder of any type of consensual lien;(b)a seller who reserved title in the goods sold;(c)a financial lessor; and(d)a buyer of accounts receivable, a commercial consignor and an operating lessor under an operation lease but only for purposes of publicity and priority;"secured obligation" means an obligation secured by a security interest;"securities" include—(a)debentures, stock, or bonds issued or proposed to be issued by a government or body corporate;(b)any right, warrant, option, or futures in respect of any debenture, stocks, shares, bonds, notes or in respect of commodities;(c)bills of exchange;(d)promissory notes; or(e)certificates of deposit issued by a bank or financial institution;"security interest" means a property right in movable property that is created by agreement to secure payment or other performance of an obligation, any type of charge over movable property, chattel mortgage and consensual lien, and includes—(a)a retention of title in movable property;(b)a right under a financial or operating lease;(c)a right of a transferee of accounts receivable; and(d)a right of the commercial consignor even if it does not secure payment or other performance of an obligation;"tangible assets" has the meaning assigned to "chattel";"warehouse receipt" has the meaning assigned to it under the Warehouse Receipt Systems Act, 2006.
3. Scope of application
Part II – Creation of security interest
4. Creation of security interest
5. Effectiveness of agreement creating security interest and duty of good faith
6. Rights and duties where collateral is in possession of secured creditor
7. Secured creditor to supply information
8. Continuation of security interest after transfer of collateral
9. Security interest in tangible assets continues in commingled goodsA security interest created in a tangible asset which becomes a commingled good continues in the commingled good, except that the security interest is limited to the value of the collateral immediately before it becomes part of the commingled good.
10. Security interest, tangible asset and intellectual propertyA security interest in a tangible asset does not extend to the intellectual property of the tangible asset, and a security interest in the intellectual property of a tangible asset does not extend to the tangible asset.
11. Tangible assets covered by negotiable documentsA security interest in a negotiable document extends to the tangible asset covered by the document, provided that the issuer of the document is in possession of the asset at the time the security interest in the document is created.
Part III – Perfection of security interest
12. Methods of perfecting security interests in collateral
13. Methods of perfecting proceeds of security interests
14. Transfer of security interests
15. Security interest perfected outside Uganda
16. Effect of transfer of collateral outside Uganda
Part IV – Registration of security interests in movable property
17. Designation of Registrar
18. Register of Security Interest in Movable Property
19. Mode of registration of security interest
20. One notice sufficient for multiple security interestsA single notice may be registered for two or more security interests created by the same grantor under two or more security interest agreements with the same secured creditor.
21. Registration of a lien
22. Information required in an initial notice
23. Period of perfection of initial notice
24. Cancellation of initial or amendment notice
25. Notice of objection
26. Notice of discharge
27. Search of register
28. Integrity and security of register
29. Limitation on liability of the registrarThe registrar or an officer acting under the authority of the registrar shall not be liable for any action or omission done pursuant to this Act.
Part V – Priority of security interests and competing claims
30. Priority of security interest in same collateralPriority between security interests in the same collateral shall be determined as follows—
31. Competing security interests created by different grantorsA security interest created by a grantor is subordinate to an earlier created security interest in the same collateral.
32. Change in means of perfection not to affect priorityThe order of priority of a security interest is not affected by a change in the method of perfecting the security interest where security interest is not at any time unperfected.
33. Priority of security interest in future obligations and property acquired after registration
34. Priority of security interest in proceedsThe priority of a security interest in the collateral shall also be the priority with respect to proceeds arising from dealing in the collateral.
35. Priority of security interest in commingled goods
36. Priority of security interest in accessionsA security interest in a tangible asset that is perfected before the asset becomes an accession, has priority over a claim to the tangible asset to which the accession is attached.
37. Priority of security interest in fixtures
38. Priority of security interest in crops
39. Rights of purchasers and other transferees
40. Priority over unperfected security interestWhere collateral is subject to a security interest that is not perfected, a person who takes possession or control of the collateral without knowledge of the security interest, takes the collateral free of an unperfected security interest.
41. Acquisition security interest
42. Security interest in negotiable instruments
Part VI – Enforcement of security interest
43. Debtor and grantor not to waive rights before defaultA debtor, grantor or any other person that owes a payment or a performance with respect to a secured obligation shall not unilaterally waive any of the rights of a debtor, grantor or that other person under this Part before default.
44. Rights of secured creditor upon default
45. Right of secured creditor with priority to enforce a security interestWhere the enforcement of a security interest is commenced by a secured creditor other than the secured creditor whose right has priority over that of the enforcing creditor, the secured creditor shall be entitled to take over the enforcement at any time before the sale of the collateral.
46. Actions permissible without judicial process
47. Expedited possession by secured party
48. Sale by secured creditor
49. Notice of disposition of collateral
50. Notice and claim for distribution
51. Application of proceeds
52. Statement of account
53. Effect of sale
54. Redeeming collateral
55. Rights acquired in collateral
56. Noncompliance with Part by secured creditorWhere a secured creditor does not comply with the requirements of this Part, the grantor, a person with a right in the collateral or the debtor, may apply to court for relief and recovery from the secured creditor of damages, for any loss caused by the failure to comply with this Part.
Part VII – General
57. Administrative penalties
60. Repeal and savings
History of this document
31 May 2019
30 April 2019 this version
31 March 2019